Frequently Asked Questions (FAQs)
- Buying
- Home Loan
- NRI Services
- Glossary
1. What kind of charges/taxes is mandatory at time of purchasing property?
Beyond the base cost of the property, buyers should account for additional expenses such as registration fees, stamp duty charges, applicable service tax, and Value Added Tax (VAT).
2. What documents and formalities are required while buying property?
The mandatory documentation for property purchase includes: the approved building plan/layout blueprint, Certificate of Commencement, Certificate of Completion, and Non-Agricultural Use Permission (if the land was originally agricultural). For land transactions in states like Maharashtra, a 7/12 extract is required, along with a No-Objection Certificate (NOC) from the builder. In resale cases, previous sale deeds must be submitted. It is strongly advised that all documents undergo rigorous verification by a qualified legal advocate.
3. Things you should check at the time of signing the agreement?
The buyer must meticulously verify all contractual details, including the base price, additional charges (such as PLC and club membership fees), carpet area specifications, and included amenities. Additionally, applicable taxes, payment terms, Occupation Certificate status, building insurance coverage, possession timeline, and penalty clauses for project delays should be thoroughly reviewed before signing the agreement.
4. What should a consumer keep in mind while purchasing a house?
Several critical factors must be evaluated when purchasing a property, including the neighborhood’s desirability and infrastructure availability. Prospective buyers should assess the availability of essential civic amenities, transportation connectivity, and construction quality standards. Particular attention should be paid to area measurements (carpet, built-up, and super built-up), basic utility provisions (water and electricity), and most crucially, the developer’s track record and market reputation.
5. What is stamp duty?
Stamp duty constitutes a mandatory tax levied by the government, similar to sales tax or income tax, which must be paid in full and within the stipulated timeframe. Documents bearing proper stamp duty payment serve as legally valid instruments and should be carefully preserved as they hold significant evidentiary value in property transactions
6. How can a buyer be protected if the project is delayed?
In accordance with the National Commission’s ruling, purchasers experiencing project delays are legally entitled to a full refund of their investment plus applicable interest and compensation. Affected buyers may formally lodge consumer complaints and seek judicial recourse to enforce these rights.
7. What is the difference between power of attorney and registry?
The Registry constitutes the official government database maintaining all legal property documents and ownership records. In contrast, a Power of Attorney represents a legal authorization where a property owner delegates specific rights to a trusted individual to manage property affairs under defined circumstances.
8. What exactly do we mean by a Free Hold flat? What are the advantages and disadvantages, if any?
A Freehold Flat represents absolute property ownership where the title holder enjoys complete and unconditional rights over the unit without any lessor-lessee relationship. The ownership is perpetual and governed solely by the prevailing land laws, with no superior landlord involved in the ownership structure.
9. How to choose a builder?
Prospective buyers should conduct thorough due diligence when selecting a developer. This includes seeking references from existing customers to assess satisfaction levels regarding construction quality, timely delivery, and the builder’s professionalism. Obtain detailed written quotations specifying project scope, approvals, material quality, and cost breakdowns. Most critically, verify the builder’s market reputation through past project reviews and legal compliance history.
10. Besides the per sq. ft. charges, what are the other charges in a multi-storey apartment?
In multi-storey residential complexes, apartment owners and tenants are typically required to pay various mandatory and optional charges beyond the basic cost. These include Preferential Location Charges (PLC) for corner or higher-floor units, external electrification fees, fire safety equipment maintenance costs, infrastructure development charges for common areas, external development fees for civic amenities, allocated parking space fees, and optional club membership subscriptions. These recurring and one-time payments collectively contribute to the maintenance and enhancement of shared facilities.
11. How to compare any best real estate property?
Online real estate platforms serve as valuable tools for prospective buyers to conduct comprehensive comparisons of residential projects across multiple cities and localities. These digital marketplaces enable users to evaluate and contrast properties based on architectural designs, pricing structures, amenity offerings, and developer credibility – all through a centralized, user-friendly interface.
12. How to verify the authenticity of the various documents submitted by the seller of the house, particularly with regard to the possibility that the house has not been sold earlier to a third party?
Engaging a qualified legal advocate is essential for conducting thorough due diligence on property documents. Specialized real estate attorneys can authenticate title deeds, verify encumbrance status, confirm regulatory approvals, and validate seller ownership claims to ensure a legally secure transaction.
13. Upon buying a flat from a builder in a building under construction, what are the permissions and papers that one should check with the builder, so as to ascertain the genuineness of the builder?
A buyer needs to check the genuinity on various grounds like the approved building plan with all the details, assurance that the floor being purchased is approved, building is being structured as per the specified rules and regulations of that area and to make sure that the urban land NOC if required has been taken or not. It should also be confirmed that the land on which the building is coming up is builder’s own or is under some kind of agreement with the landlord.
1. What are the types of Home loans available?
There are different types of home loans available depending upon the purpose for which the home loan is being taken.
- Home Purchase Loan
- Home Improvement Loan
- Home Construction Loan
- Home Extension Loan
- Land Purchase Loan
- Loans for NRIs
2. What are the factors you should keep in mind before getting a home loan?
To steer clear of future financial shocks, a homebuyer must start by understanding their own financial standing—knowing their creditworthiness, loan eligibility, and budget limits is key. It’s crucial to shop around, comparing interest rates across different loan types, and to dig into the fine print: refinancing possibilities, flexible repayment plans, prepayment penalties (if any), and the option to make partial payments.
Arming yourself with this knowledge isn’t just smart—it’s the shield that protects your dream home from becoming a burden.
3. What are the eligibility conditions for a home loan?
To qualify for a home loan, the applicant must meet these key criteria:
Be an Indian resident or a Non-Resident Indian (NRI).
Be at least 24 years old when the loan begins.
Not exceed 60 years of age by the time the loan is fully repaid.
Have a stable and reliable source of income.
These requirements ensure that borrowers are financially prepared for the commitment of a home loan.
4. What are the other costs that usually accompany a home loan?
Beyond the principal loan amount, borrowers should factor in additional expenses such as:
Processing fees – Covering administrative and verification costs.
Pre-payment penalties – Applicable for early loan closure in some cases.
Incidental charges – Including documentation, legal consultations, or other ancillary services.
Being aware of these hidden costs ensures a transparent borrowing experience and prevents unwelcome financial surprises.
5. What are the tax benefits of home loans?
Home loans offer attractive tax benefits under Section 80C and other provisions of the Income Tax Act, 1965:
Principal Repayment Benefits:
The principal portion of your EMI qualifies for deduction under Section 80C
Shares the Rs. 1.5 lakh limit with other investments like PF, PPF, and life insurance premiums
Effectively reduces your taxable income
Interest Payment Benefits:
Interest payments up to Rs. 2 lakh annually are deductible from your taxable income
Applicable after property construction is complete
Deduction is claimed against your income from house property
These provisions make home loans one of the most tax-efficient borrowing options available, while helping you build valuable assets.
Note: Current tax slabs and limits apply as per latest budget provisions.
1. What should an NRI keep in mind while purchasing a PROPERTY IN INDIA?
For NRIs investing in Indian real estate, thorough due diligence is crucial to ensure a secure and compliant purchase:
Key Considerations for NRIs:
Market Analysis: Carefully evaluate current property trends and fair valuation in the target area
Document Verification: Scrutinize all property papers, including title deeds and ownership history
Regulatory Compliance:
✓ Confirm the layout plan has proper approvals
✓ Verify all municipal clearances and utility NOCs
✓ Check adherence to local building bylawsFinancial Clearances: Ensure all outstanding taxes, development charges, and utility dues are settled
This comprehensive approach helps NRIs mitigate risks and make informed investment decisions in the Indian property market.
2. Does RBI have any guidelines for loans to NRIs/PIOs?
The RBI mandates specific guidelines for NRI home loans to ensure financial compliance and transparency:
Key Regulations:
Loan-to-Value Ratio:
✓ Maximum 85% of the property’s registered value
✓ Minimum 15% contribution required from the NRI borrower
Payment Protocol:
All financial transactions must flow through proper banking channels
Both down payment and EMIs must be paid via:
✓ Foreign remittances from NRE/NRO accounts
✓ Legitimate international fund transfers
These measures maintain regulatory compliance while facilitating secure property investment for overseas Indians.
3. How is the sanctioning authority and monitoring authority different in India?
In India’s urban governance framework, monitoring authority varies by region:
Jurisdictional Oversight:
Major States:
✓ Municipal Corporations serve as the primary regulatory body
✓ Oversee urban planning, development approvals, and complianceSmaller States & Rural Areas:
✓ Town & Country Planning Departments assume control
✓ Manage rural-urban interface and regional development
This dual structure ensures tailored governance while maintaining standardized development protocols across all regions.
4. Do NRIs require consent of the Reserve Bank to buy immovable property in India?
NRIs enjoy significant property-buying freedom in India, with only one key restriction:
Key Regulation:
No RBI approval required for purchasing:
✓ Residential properties
✓ Commercial real estate
✓ Industrial plots
✓ Any non-agricultural land
Special Exception:
✖ Mandatory RBI permission needed for:
• Agricultural land
• Plantation properties
• Farmhouse acquisitions
This streamlined policy encourages NRI investment while protecting agricultural interests.
5. Is there any limit on the number of housing properties that may be purchased by an NRI?
For NRIs investing in Indian real estate:
Purchase Freedom:
✓ No restrictions on the number of residential properties that can be acquired
✓ Complete ownership rights on all purchased properties
*Repatriation Rules:
✖ Capital repatriation limited to only two residential properties
✖ Subject to foreign exchange regulations and tax compliance
Key Consideration:
While NRIs can build an unlimited property portfolio in India, they must carefully plan which assets to eventually repatriate based on these limits.
6. What are the guiding principles for getting hold of agricultural land / plantation property / farmhouse by NRIs and foreign citizens of Indian origin?
For NRIs seeking special permission to purchase regulated property types in India:
Submission Process:
✓ All applications must be addressed to:
The Chief General Manager
Reserve Bank of India, Central Office
Exchange Control Department
Foreign Investment Division (III)
Mumbai – 400 001
*Property Types Requiring Approval:
✓ Agricultural land
✓ Plantation properties
✓ Farm houses
*Key Notes:_
Applications should include complete property details and purpose of acquisition
Processing time may vary based on documentation completeness
Approval is subject to RBI’s discretionary assessment
Glossaries & Abbreviations:
BSP
Basic sale price is the basic price of the property. This cost does not include other charges like EDC/IDC/IFMS/EEC/PLC/Club membership and car parking.
PSF
Per Square Feet.
Development Charges
Developers have to pay these charges to the government for civic amenities such as roads, water/electricity supply, sewerage and drainage. The development charges are fixed by the local authorities and are passed on to buyers in proportion to the built-up area of their properties.
PLC or Preferential Location Charge
Is the extra charge paid to a unit which has a better location within a particular layout or complex.
IFMS (Interest Free Maintenance Security)
One time charge levied by developer to maintain the society. This is a common pool of funds which works as a maintenance charge.
EEC and FFC
EEC is external electrification charge and FFC is fire fighting charge and these are levied for obvious reasons.
CAM
Common Area Maintenance which includes hallways, pathways and utilities. CAM fees is accumulated by the landlord from tenants to cover maintenance.
FAR or Floor Area Ratio
The maximum amount of construction allowed on a given plot of land. This is purely dependent on the plot area and would vary from one locality to another based on different factors.
Sale Deed
Sale Deed provides the buyer an absolute and undisputed ownership of the property.
Built Up Area:
Built-up area denotes to the entire area of the floor including carpet area, walls, lobbies/corridors, atrium areas and basement.
Carpet Area
The actual usable area within the walls of the unit is Carpet area.
Super Built Up Area
Super built-up area includes common amenities, such as the area of lift shafts, lobby, and corridor, proportionately divided among all flats. The common usable areas, such as a swimming pool, garden and clubhouse may also be included in it.
by Tirthadeep Ghosh